Prospective Buyers: What’s the Scenario?

The most desired transaction for lower middle market business owners contemplating the sale of their business requires deep consideration of the characteristics, motivations, and aspirations of the businesses’ prospective buyers. Customarily, strategic and financial buyers have the largest appetite for acquisitions in the private capital marketplace, and there are significant differences between the two buyer-types that necessitate further examination. Some of these differences include:

FINANCIAL BUYERS:
  • Includes private equity groups, holding companies, high net worth individuals;
  • Target single, cash-producing entities; attractive industries; high growth potential;
  • Focus on earnings growth; invest strictly to realize a financial return
STRATEGIC BUYERS:
  • Includes competitors, customers, suppliers, unrelated companies;
  • Established, operating businesses; possess industry experience/knowledge;
  • Focus on synergies/integration; increase long-term shareholder value;
  • Acquire to increase market share, expand geographically, gain technologies/key employees or diversify revenue streams

Two exits rarely follow the same path; however, it’s critical that the M&A Advisory Team understands your ‘perfect scenario.’ Financial buyer or strategic buyer – the knowledgeable investment bankers at Allston Advisory Group have the expertise and resources to customize a successful transaction process that captures your exit strategy objectives.